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Dollar Recovers on Fed Rate Rise Expectations

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Starting today’s report with an important quote “the U.S. central bank would likely move forward with gradual increases in interest rates.” Fed Chair Jerome Powell said yesterday.

USD

The Greenback rose five-week highs vs. a basket of major currencies after Federal Reserve Chairman Jerome Powell said the U.S. economic outlook remains bright, bolstering bets on further Fed rate hikes this year. Additionally, Powell also said that his personal outlook for the economy has strengthened since December. On the release front, traders are awaiting the U.S. Gross Domestic Product Annualized, which is expected to hit 2.5% from 2.6%.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down by 0.09% at 90.39, after hitting a two-and-a-half week peak of 90.41 overnight.

EUR

The Single currency fell by 0.25%, to settle at $1.2202, as dollar recovered. Earlier data showed that the German Unemployment Claims Rate s.a. (FEB) settled at 5.4%. On the release front, markets are awaiting EUR Euro-Zone Consumer Price Index Estimate (YoY) (FEB), which is expected to hit 1.2% from 1.3%.

GBP

The Sterling pound fell by 0.9%, to settle at $1.3900. No major reports are due from The UK today.

JPY

Against the JPY, the USD rose by 0.25%, to settle at ¥107.07 as traders turned to the Greenback.

Gold

Earlier today, Gold prices failed to manage its gains negatively affected by a strong USD, amid risk appetite after comments by Federal Reserve Chair Jerome Powell in the previous session.

Gold Futures - Apr 18 (GCJ8), rose by 0.11%, to settle at $1,320.00.

Oil

Early on Wednesday, Crude oil prices declined, as news of an increase in U.S. inventories dented optimism surrounding OPEC efforts to support prices and limit output. On the release front, traders are now looking ahead to official data from the U.S. Energy Information Administration, due later today, which is expected to hit 2233k from -1616k. Crude Oil WTI Futures - Mar 18 (CLH8) fell as much as 0.16%, to settle at $62.91, and Brent Oil Futures - Apr 18 (LCOJ8) was down by 0.03% at $66.50.

The most important economic events:

  • EUR German Unemployment Change (000's) (FEB): (GMT 08:55) – Important - Forecast (-15k) - Previous (-25k).
  • EUR German Unemployment Claims Rate s.a. (FEB): (GMT 08:55) – Important - Forecast (5.4%) -Previous (5.4%).
  • EUR Euro-Zone Consumer Price Index Core (YoY) (FEB A): (GMT 10:00) – Important - Forecast (N/A) --Previous (1.0%).
  • EUR Euro-Zone Consumer Price Index Estimate (YoY) (FEB): (GMT 10:00) – Important - Forecast (1.2%) --Previous (1.3%).
  • USD Gross Domestic Product Annualized (QoQ) (4Q S): (GMT 13:30) – Important - Forecast (2.5%) --Previous (2.6%).
  • USD Gross Domestic Product Price Index (4Q S) (GMT 13:30) – Important - Forecast (2.4%) --Previous (2.4%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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